Before Buying And Building On The Big Island Of Hawaii: SSPP Connection Costs
Understanding SSPP Charges
When you’re eyeing a vacant lot on the Big Island for purchase, it might seem like a blank canvas—ripe with possibilities for building your dream home or investment property. However, an important practical consideration that might not immediately spring to mind is the availability and cost of utilities. Among these, electricity is key.
Why is electricity so important? Well, modern living depends heavily on it. From basic needs like lighting and cooking to luxuries like entertainment and air conditioning, electricity plays an integral role. If your chosen lot lacks an electricity connection, setting up one can be a significant undertaking both in terms of logistics and costs.
This is where SSPP – the Special Subdivision Project Provision – comes into play. Essentially, SSPP is a mechanism that HELCO (Hawaii Electric Light Company) uses to equitably distribute the costs of extending electrical infrastructure to areas where it wasn’t previously available, particularly in new subdivisions. If you’re buying a vacant lot in an area where HELCO has had to extend their network to provide service, it’s likely you’ll encounter SSPP charges.
How Does SSPP Work?
When HELCO extends a power line to an area that previously did not have access to electricity, the cost of that project is divided among the properties served by the new infrastructure. Each property owner is then assessed a fee, known as an SSPP charge, to help reimburse the cost of the extension.
These charges can vary significantly based on the complexity and cost of the project, the number of lots served, and the distance from the lot to the power source. They are typically assigned to each lot when a subdivision is created, and the charges stay with the lot until they’re paid off, regardless of changes in ownership.
If there are no power poles near your lot HELCO may need to extend the grid to reach your home. However, this can be an expensive process as the cost includes the installation of additional power poles, transformers, and wiring. You’ll also likely need to pay for a professional survey and the acquisition of any necessary permits or easements. Remember, this is where SSPP charges come in, as they help to distribute the cost of extending electrical infrastructure. If other property owners in the area also need power, the costs could be shared amongst you.
Why should property buyers care about SSPP charges?
SSPP charges can be a significant addition to the cost of purchasing a vacant lot and getting it ready for construction. Before you purchase a property, it’s important to know whether an SSPP charge applies and, if so, how much it is. Not only can this help you understand the total cost of your investment, but it can also affect the timeline and logistics of getting your property connected to the electrical grid.
It’s also important to understand that SSPP charges are separate from the cost of actually running the power line from the road to your house. Even after the SSPP charge is paid, you will still need to cover the cost of trenching and installing the power line to your specific lot, as well as any required permits or inspections.
How can I find out if a property has an SSPP charge?
SSPP charges can be checked through HELCO directly, or through a realtor or title company during the due diligence process when buying a property.
To get accurate information, you’ll need the Tax Map Key (TMK) of the property. With this, HELCO can provide information about any outstanding SSPP charges and the cost to connect to the power grid.
Download the Request for Power Availability Form, fill it out and fax it to HELCO.
Understanding SSPP charges is a vital part of the property buying process in Hawaii, particularly when considering vacant lots. By taking these costs into account, buyers can make informed decisions and budget more accurately for their property investments. Always remember to consult with real estate professionals who can help guide you through the complexities of the real estate process.
About the Author
James T. Morrison, R(S)
James T. Morrison is a Realtor with Knutson & Associates, and part of the Papakea Collection Sales Team. You can email him directly at JTM@Jamesmorrisonhawaii.com or call or text him directly at (808) 339-8249
Licesnse #79190 Realtor
papakeacollection
February 28, 2025
